First Republic Bank downgraded to junk by S&P and Fitch on risk of clients pulling deposits in the wake of SVB failure
First Republic Bank's credit rating was cut to so-called junk status at S&P Global Ratings and Fitch Ratings on Wednesday, with the agencies citing risks that customers will withdraw funds from the San Francisco-based lender.
in SVB's bond holdings. Since then, the federal government has rolled out a new liquidity mechanism to help prevent a run on other US banks. "This not only drives a high proportion of uninsured deposits as a percentage of total deposits but also results in deposits that can be less sticky in times of crisis or severe stress," said Fitch. indicated 68% of its roughly $176 billion in deposits at the end of 2022 was uninsurable by the FDIC. The FDIC historically has insured deposits up to $250,000, but it guaranteed SVB's beyond that limit.
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